Foreign Relations of the United States, 1950, East Asia and the Pacific, Volume VI

FMACC Files¹

Minutes of the Nineteenth Meeting of the Foreign Military Assistance Coordinating Committee, Department of State, June 30, 1950, 2:30 p. m.—5:00 p. m.

June 30, 1950, 2:30 p.m. to 5:00 p.m.

secret

Attending:

• Department of State
• Messrs. John H. Ohly, Chairman
• John O. Bell
• Harold Adams
• William H. Bray, Jr.
• Richard R. Ely
• John T. Forbes
• Willard Galbraith
• Robert E. Hoey
• Ridgeway Knight
• William Lacy
• Kenneth Landon
• Elbert G. Mathews
• John Melby
• John Murphy
• David A. Robertson
• Howland H. Sargeant
• Arthur Schoenfeld
• Eli Stevens
• Alfred G. Vigderman
• William Dudley Wright

• Department of Defense
• Major General L. L. Lemnitzer
• Major General Stanley L. Scott
• Major General Graves B. Erskine
• Lt. Colonel H. J. Lowe
• Major H. Reger
• Commander D. C. Richardson
• Commander B.L.E. Talman
• Mr. Earl DeLong
• Mr. Kenneth Young
• Mr. John Adams

• Department of the Army
• Lt. Col. Henry Neilson
• Lt. Col. Bernard Thielen

• Department of the Navy
• Capt. J. S. Champlin
• Capt. M. H. Halstead

• Department of the Air Force
• Lt. Col. J. E. Blair
• Lt. Col. E. H. Henderson

• Economic Cooperation Administration
• Messrs. Edward T. Dickinson
• Norman S. Paul
• Harlan Cleveland

1. Terms or Reference of Joint MDAP Survey Mission to Southeast Asia

The Committee approved, subject to certain additions, a draft of the terms of reference of the SEA Survey Mission. The terms of reference as approved will be distributed as FMACC D–29.²

2. Briefing of Southeast Asia Survey Mission

The meeting was called to brief the members of the Survey Team on the general political, military and economic situations existent in the countries of Southeast Asia, in order that the objectives of the Mission may be placed properly within the perspective of our policies in the area. A more detailed briefing will be supplied to the Team prior to its departure. The Mission will also be furnished certain written material, notably Mr. Kenneth Landon’s³ despatches transmitted during his recent trip to the area and the appropriate State Department country policy studies.

a. political aspects

Mr. William Lacy, Acting Director of the State Department’s Office of Philippine and Southeast Asian Affairs, presented a brief outline of our political objectives in the area. He pointed out that the region is of the highest political importance to the West for three principal reasons:

(a) Frustrating the Communists in their attempt to obtain control of Southeast Asia will help to frustrate also their plans for complete control of the Asiatic mainland, and indeed weaken the degree of control they already have, by preventing their exploitation and acquisition of the area’s food, raw materials and industrial products;

(b) Events in Southeast Asia will influence the course of future events in the rest of Asia and in other parts of the world;

(c) The economic importance of Southeast Asia to the U.S. was forcibly demonstrated during the last war, when we experienced serious shortages of critical materials produced in that area.

The attainment of political and economic stability in Southeast Asia depends in large part upon the establishment of adequate military forces within each of the countries in the area. The problem, therefore, is the proper integration of our political, economic and military policies conducive to the attainment of those objectives. Mr. Lacy pointed out that in all of the Southeast countries except Indo-China the local nationalist movement is non-Communist. A strong anti-Communist attitude is developing also, particularly amongst people who have experienced the rigors of Communist rule. A resolute pursuit of our political, economic and military programs will encourage the further development of that attitude and conversely induce a stronger inclination toward the West.

Mr. Lacy discussed the situation existing in each of the countries to be visited by the Mission:

(1) Indo-China—Here exists, from our viewpoint the worst situation in Southeast Asia. Strategically Indo-China is extremely important, since its fall to the Communists would encourage communization of the rest of Southeast Asia. Indo-China is the only Southeast Asian country where a nationalist movement was seized upon and exploited by the Communists. Our policy (which unfortunately does not have the whole-hearted support of the French) is to counter this Communist position by supporting Bao Dai, making whatever concessions are necessary to Indo-Chinese nationalism, and by so doing provide to him the stature necessary to remove the basis for the political incitation which is Ho Chih Minh’s main weapon. A successful military operation in Indo-China is essential, however, for the achievement of this objective.

Mr. Lacy recalled to the Survey Team the fact that military control of Indo-China is vested in the French, against whom great resentment exists on the part of the local population. A difficult task of the Mission will be to impart to the Vietnamese the conviction that U.S. aid is being provided primarily for their benefit but at the same time not destroy French military expertise and control. (A more detailed account of the domestic political picture in Indo-China will be furnished to the Team before its departure.)

(2) Indonesia—The nationalist movement in Indonesia is anti-Communist, due in large part to the predominantly Muslim population. The leaders can be counted on if only because of their knowledge that their political positions depend upon their control of the nationalist movement and the suppression of Communist activity.

Military assistance to Indonesia will be of a type necessary for the maintenance of internal security. The chief problem, however, is to supply such assistance in a manner which will strengthen, and not weaken, the present Government. Soekarno presently is under fire because of his alleged pro-American proclivities.

(3) Thailand—In Thailand the Government is anti-Communist. The country is, however, still suffering socially and economically from the devastating effects of Japanese occupation—effects which are conducive to the growth of Communism. Our assistance will therefore be directed toward the maintenance of internal security.

(4) Malaya—There is as yet no nationalistic movement of serious proportions in Malaya. The difficulty there is caused by imported Chinese thugs who, by their guerrilla activities, are sabotaging Malaya’s political economy. The British consider the problem to be of an essentially military nature, an approach with which we agree. The warfare in the country is extremely difficult and of the type which results in the pinning down of a great number of troops by a comparatively small number of guerrillas. A serious difficulty faced by the British is their inability to break the lines of communication between the guerrillas and their command posts, which apparently are under the direction of professional Communists established outside of Malaya.

(5) Burma—Mr. Elbert G. Mathews, Director of State Department’s Office of South Asian Affairs, reported on the situation in Burma. The problem in Burma arises from the fact that even before that country achieved its independence from the UK the Anti-Fascist People’s Freedom League (AFPFL), which dominates the make-up of the present government, had already begun to split up into various leftist groups, creating thereby a lack of political cohesiveness which still exists. Certain of these leftist groups, including the Communists, and minority groups desiring political autonomy, resorted to armed guerrilla activity.

The Burmese Government has done a good job within the past year in suppressing the guerrillas, and as a result the economic situation looks more hopeful. There has, however, been a recent very serious development. Some months ago Chinese Nationalist troops, fleeing from the Chinese Communists, crossed the Burmese border and established themselves in Kentung province. Recent reports indicate that those troops are in effect acting as an occupying force and refuse to be disarmed and interned. The Burmese Government is concerned that the Chinese Communists will follow the Nationalist troops into Burma, and has appealed to India to use its good offices to persuade the Chinese Communists not to take such action. It has also asked the U.S. to request the National Government on Formosa to order the Nationalist troops to disarm. It seems unlikely, however, that the troops would comply. The Burmese Government appears unable to cope with the situation, in view of its concentration of resources on the suppression of guerrilla activity.

Recalled also to the Mission’s attention was the poor state of relations between the Burmese Army and the British Military Mission, which the Survey Team, if circumstances permit, might attempt to improve.

b. economic aspects

Mr. Harlan Cleveland,⁴ ECA, presented a brief account of the economic situation in Southeast Asia and U.S. economic programs contemplated for the area.

Our economic programs in Southeast Asia will be based on the report of the Griffin Mission, and will be implemented by missions to be known as “STEM” (Special Technical and Economic Missions). He cautioned that this operation is not to be confused with the ECA.

Mr. Cleveland pointed out that the economic programs contemplated are related intimately to our aim to achieve political stability in Southern Asia, instill in the people a feeling of confidence in their governments, and encourage the area’s continued orientation toward the West. Economic programs will encourage the attainment of these objectives by bringing real, and if possible immediate, economic benefits to large numbers of the inhabitants of the area.

Eighty percent of the population of Southeast Asia live in rural areas; the programs designed to benefit the majority must therefore be of a rural nature. This fact requires a change in the concept upon which ECA aid to highly developed countries was based, namely the concentration on supplying of a few bulk commodities and a resultant “seeping down” of economic benefits to the people. In Southeast Asia aid given must be direct, and of immediate benefit to large numbers of people. Primary emphasis will therefore be placed upon health, agricultural rehabilitation, and training and education programs.

There must also, however, be programs of a longer range nature, of a type to convince the people that their hopes for the future can be realized through cooperation with the West. Such programs will involve such things as advanced agricultural techniques and science, although, remembering the experience of the Joint Committee on Rural Reconstruction in China, some difficulty may be encountered in persuading the local farmers to adopt methods other than those traditionally used.

The fund available for Southeast Asia economic programs consists of $44 million for the “general area of China,” from the $98 million unexpended from the China Aid fund. $54 million of the $98 million was earmarked by Congress for other purposes. The Griffin Mission reported that adequate programs for the area would require $61 million. However, because of the time needed for organization staffing, etc., the $44 million available may be sufficient for some time.

The “general areas of China” is defined, for economic program reasons, as Indo-China, Burma, Thailand, and Indonesia, Malaya not being included in view of the para-military nature of the equipment to be provided under the program for that country.

The “STEMs” in each country will be comparable to regular ECA Missions, although possessing a different staffing pattern. Each mission will consist of a number of specialists—primarily on health, agriculture and industry—with other types as needed to meet particular conditions in a given country.

Bilateral draft agreements, upon which the relations of the “STEMs” vis-à-vis the local government will be based, have been sent to the field. In Indo-China those relations will be with each of the native governments, not with the French.

The financing of a program is a particularly knotty problem, the limiting factor being not the lack of dollars but the lack of sufficient internal resources, which are necessarily concentrated on military needs. To meet the situation a change will be required in the ECA concept, as applied in Europe, that dollar financing can take place only when absolutely necessary. Dollars supplied under the SEA programs will be used to generate local currency (the payment of wages, etc.), to assure that sufficient internal resources will be available to permit proper use of equipment and materials supplied under the programs.

c. military aspects

General Lemnitzer posed the main military problems with which the Mission will be faced, and outlined the functions it is expected to perform. A most important duty of the Mission will be to collect information upon which intelligent programs for the area and for each country in the area can be based. Until Military Advisory Groups are established in Southeast Asia reliance will necessarily be placed upon the intelligence brought back by the Survey Mission. Such information should include in part:

(a) The military plans of the governments of each country;

(b) The materiel presently available in each country or to be forthcoming from European sources;

(c) The facilities available for training of native troops;

(d) Requirements from the U.S.;

(e) Priorities for supplying of U.S. equipment; and

(f) The type of country-level organization needed for proper implementation of programs, and the related question of the attitude of the local government as to numbers of U.S. personnel in such organizations.

Also a delicate position which the Mission must maintain in its discussions with European and native officials is the avoidance of any implication that the U.S. is prepared to assume European military responsibilities in the area.

General Lemnitzer raised also the public relations aspect of the Mission, feeling that a comprehensive statement of its function, etc., should be prepared for submission to the press. The matter was turned over to the FMACC Public Information Working Group, which will consult with Mr. Sargeant,⁵ P, and Mr. Connors, FE, in the preparation of such a statement.

Mr. Bell mentioned also that the Mission should, through an explanation of the operating problems involved, make every effort to dissipate any expectation on the part of the countries visited that U.S. aid will be forthcoming almost immediately after the arrival of the Mission.

3. Bilateral Agreements With Southeast Asian Countries

Mr. Vigderman⁶ pointed out that although legally no bilateral agreements are required on aid supplied under Section 303, we are in the process of obtaining such agreements for our own protection. The agreements follow the pattern of those consummated with NAT countries, varying only according to the type of aid to be supplied. (For an example of the provisions of such agreements see FMACC D–33/3, draft No. 2.)⁷

The following agreements are now in process:

Indonesia—We have received comments on a draft submitted to Djakarta, and the agreement will be ready for FMACC consideration shortly.

Indo-China—A draft has been sent to Saigon, upon which comment is awaited.

Burma—The first draft is in preparation.

Thailand—An FMACC-approved draft is ready for transmission to Embassy Bangkok for negotiations with the Thai Government.

Malaya—A draft agreement has not yet been prepared, in view of the lack of a firm program and allocation.

Mr. Dickinson, on the basis of ECA’s experience, commented that, because of a possible charge of exploitation, the strategic materials and local currency provisions may give rise to some controversy.

4. The Korean Situation and MDAP

The Committee discussed briefly a paper, prepared in State, raising certain questions relating to the effect of the attack by North Korea against the Korean Republic on the MDAP for Korea.⁸ The paper will be studied in each agency and discussed at a future meeting.

1. Lot 54D5, Files of the Foreign Military Assistance Coordinating Committee and its predecessor, the Foreign Assistance Correlation Committee.
2. Not printed. For the terms of reference and composition of the mission, see telegram 1 to Saigon, July 1, infra, and telegram 14 to Saigon, July 5, p. 114.
3. Mr. Landon was a member of the staff of the Office of Philippine and Southeast Asian Affairs.
4. Acting Chief of the Far East Program Division, Economic Cooperation Administration.
5. Howland H. Sargeant, Deputy Assistant Secretary of State for Public Affairs.
6. Alfred G. Vigderman, attorney-adviser, Office of Legal Adviser, Department of State.
7. Not printed.
8. The paper, “Basic MDAP Questions Raised by the Invasion of South Korea and the President’s Statement on June 27, 1950,” undated, is not printed (790.5 MAP/7–350).